When you talk about healthcare you mention that about 62% of spending is private, but then you also mention that the ratio of private to public healthcare spending is 9. Unless there is some other type of spending (not private and not public) I think these figures contradict each other. For example if 9 was the right ratio then 90% of spending is private and not 62%.

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I think the paradox under discussion is one of the main questions of development economics. Many of the interventions proposed to help developing economies are targeted at improving certain factors that are assumed to be correlated with actual positive outcomes. That is, aid may be given to help increase literacy in the hope that this will translate into greater economic success and better outcomes for the whole population. The Kerala paradox is that this place has really outstanding indicators, but these haven't resulted in big economic success.